02-031 C.M.R. ch. 425, § 22 - Standards for Marketing

Current through 2022-14, April 6, 2022

A. Every insurer, health care service plan or other entity marketing long-term care insurance coverage in this state, directly or through its producers, shall:
(1) Establish marketing procedures and producer training requirements to assure that:
(a) Any marketing activity, including comparison of policies by its producers, will be fair and accurate; and
(b) Excessive insurance is not sold or issued.
(2) Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy the following notice:

"Notice to buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations."

(3) Provide to the applicant copies of the disclosure forms required in Section 9(B).
(4) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has accident and sickness or long-term care insurance and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contracts, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance is not required.
(5) Establish procedures, readily subject to audit by the superintendent, for verifying compliance with this section.
(6) Provide written notice to prospective insureds at the time of solicitation of the availability of any public or private insurance counseling program for senior citizens, such notice to include the name, address and telephone number of each program.
(7) Assure that any policy, certificate or rider conforms to the definitional requirements in Section 6(A) of "noncancelable," "level premium" and any other word of similar import.
(8) Explain the contingent nonforfeiture benefit upon lapse described in Section 26(C) and, if applicable for policies issued or renewed on or after January 1, 2008, the additional contingent benefit upon lapse provided to policies with fixed or limited premium paying periods in Section 26(C)(4).
B. In addition to the practices prohibited in 24-A M.R.S.A. §§2151 et seq., the following acts and practices are prohibited:
(1) High pressure tactics. Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.
(2) Cold lead advertising. Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.
C. The following requirements apply to association groups as defined in 24-A M.R.S.A. §2805-A:
(1) With respect to the obligations set forth in this subsection, the primary responsibility of an association when endorsing or selling long-term care insurance shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions. Associations shall provide objective information regarding long term care insurance policies or certificates endorsed or sold by such associations to ensure that members of such associations receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold.
(2) The insurer shall file with the insurance department the following material:
(a) The policy and certificate,
(b) A corresponding outline of coverage, and
(c) All advertisements requested by the insurance department.
(3) The association shall disclose in any long-term care insurance solicitation:
(a) The specific nature and amount of the compensation arrangements (including all fees, commissions, administrative fees and other forms of financial support) that the association receives from endorsement or sale of the policy or certificate to its members; and
(b) A brief description of the process under which the policies and the insurer issuing the policies were selected.
(4) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.
(5) The board of directors of associations selling or endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.
(6) The association shall also:
(a) At the time of the association's decision to endorse, engage the services of a person with expertise in long-term care insurance not affiliated with the insurer to conduct an examination of the policies, including its benefits, features, and rates and update the examination thereafter in the event of material change;
(b) Actively monitor the marketing efforts of the insurer and its agents; and
(c) Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.
(d) Subparagraphs (a) through (c) shall not apply to qualified long-term care insurance contracts.
(7) No group long-term care insurance policy or certificate may be issued to an association unless the insurer files with the state insurance department the information required in this subsection.
(8) The insurer shall not issue a long term care policy or certificate to an association or continue to market such a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set forth in this subsection.
(9) Failure to comply with the filing and certification requirements of this section constitutes an unfair trade practice in violation of 24-A M.R.S.A. Chapter 23.

Notes

02-031 C.M.R. ch. 425, § 22

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